So one ETF that has a small part of my portfolio is BND. Basically an aggregate of bonds managed by Vanguard. It pays out a monthly dividend which has not been very impressive over the past few years, but the price was rising, presumably because the dividend was higher than what you'd get with a bond or high interest account.
As you all likely know, interest rates have been on the rise. The price of BND cratered, but the yield has gone up to 2.55%. I'm wondering if it would be a relatively safe bet that once rates start dropping again, or even if they just stay steady that we'd be looking at some decent capital gains. Then of course the rates will also go up as the lower yield bonds mature and are replaced with higher yield bonds.
Do I properly understand this, or am I missing something? This isn't a slam dunk, but it also seems like a fairly conservative assessment.
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